The MMTV LTR adopts a specific nucleoprotein organization when introduced into cells. This structure involves the positioning of six nucleosomes (A-F) over the 1300 base pair LTR. A specific chromatin transition is induced by the binding of steroid receptors to the B nucleosome. By comparing the activity of transient MMTV reporter constructs (which are not organized in specific chromatin structures) with identical sequence elements that have replicated (and manifest the phased nucleosome array), we have shown that the chromatin transition is mechanistically important in transactivation, and that steroid receptors function on replicated genes by relieving chromatin repression. We investigated the basis of nucleosome positioning over the MMTV LTR, and showed that each phased nucleosome corresponds to a family of octamer cores positioned in that region. Thus, the low resolution phasing pattern results from the frequency-biased occupancy of a subset of these frames. This distribution of frame occupancy is highly reproducible in independently established cell lines, indicating that organization of the structure is directed by features of LTR DNA and proteins that bind to the sequence. We have demonstrated that activation of the MMTV promoter is significantly modified when organized in this highly reproducible chromatin structure. (1) Transiently introduced progesterone receptor was found to be incapable of activating the replicated structure, although quite active on transient, disorganized templates. In contrast, transiently introduced glucocorticoid receptor was functional on both transient and stable templates. Studies are underway with chimeric receptors to evaluate region(s) of the receptors that are necessary for chromatin activation. (2) Activation of the PKA phosphorylation pathway stimulated steroid activation of transient templates, but suppressed expression from replicated templates. (3) Hyperacetylation of histones leads to a complex response for the MMTV promoter when integrated in replicated chromatin. Sequences in the immediate proximal promoter stimulate promoter expression when histones are hyperacetylated, while the enhancer at the 5' end of the LTR is negatively affected by histone hyperacetylation. These studies confirm that the organized nucleoprotein structure found on the MMTV LTR is functionally important in gene regulation.